Derek Halpenny, European Head of GMR at MUFG, notes that as was widely expected, Chancellor Merkel suffered losses in local elections on Sunday with AfD performing well fuelled by protest votes over the government’s open-door migrant policy. Key Quotes “AfD won 24.2%, 15.1% and 12.6% in the three contested states with Merkel’s CDU falling to its worst result in Baden-Wuerttemberg in post-war politics. There is little in terms of financial market implications at this stage although were the euro-zone debt crisis to erupt once more, it is difficult to envisage Angela Merkel having the political influence in leading Europe through another crisis given her own domestic standing has weakened considerably since the escalation of the migrant crisis last year. Given most analysis suggests the migrant crisis could yet worsen, the local election results suggest increased political uncertainty heading into 2017 when Germany holds its next general election. 2017 is also the year of the French presidential elections where momentum toward the right-wing party, National Front, is even more apparent.” For more information, read our latest forex news.